Collection agency is threatening with a lien
Hi,
I have falling behind on my cc payments and I am now in debt $6000. It has gone to a collection agency who is threatening a lien on my house (mortgage).
What are my options. I am retired and besides OAS and CPP I do not have any other income.
I am very concerned because my home is all I have.
Posted from: Ontario
The problem you are experiencing seems to be one of cash flow. The credit card company wants their money now. If you do not pay them they are entitled to get a judgment from the Court which can be filed against your house and if not attended to could result in forced sale of your residence.
The two most likely options are:
1. Sell the house and pay off the credit card debt. The balance could be used to supplement your living costs.
2. Use the equity in your home to secure a small loan to pay off the credit card company. The benefit of this action is that you get to stay in the house. Such secured loans can be at a substantially lower interest rate and repayment can be over a longer period of time. In order for this solution to work you have to be able to afford the additional expenses every month to pay off the mortgage.
It is necessary, which ever solution you think is best for you, that you do careful budgeting of your income and expenses. The problem occurred because you spent too much money leaving a balance on your credit card, you can no longer afford to do this. Generally speaking a good budget will allow you to enjoy a higher standard of living on the same income and you may find that this allows you to pay off the mortgage. The options of bankruptcy or a consumer proposal are not available to you because of the equity you have in the house.